An AP report on Chile’s woman president, Michelle Bachelet, points out her efforts to improve the participation of women in Chile’s workforce. It cites several statistics, two of which are curious when taken together.
The first assertion is that women are paid less than men in Chile. They don’t say whether comparisons were being made in the same jobs, but let’s assume apples are compared to apples:
There’s more to be done in this conservative country where women often earn up to 30 percent less than men, administration officials say.
Later on, the same article reports an underrepresentation in the work force. Again, let’s charitably assume that differences in unemployment rates between men and women support this disparity:
[Womens'] average work participation in Chile is just 37.5 percent, compared with 47 percent for Latin America.
In a rational economic world, these two data seem to contradict. An employer would be foolish to hire a man if an equally qualified woman could be found to do the same job cheaper. Machismo alone (even the mythical Chilean type) isn’t powerful enough to sacrifice productivity and profits in the highly-competitive world of Chilean business. If women were indeed cheaper to hire than men, then men would be discriminated against, not women.
So something else is going on, but the reporter apparently wasn’t curious enough to find out.
As I said, presumably the “administration officials” were comparing like professions, and not housemaids and nannies to construction workers and cab drivers. After all, Chiilean universities are graduating roughly the same number of women as men in many professions, so let’s assume that women engineers or schooteachers earn less than men at the same position and experience. Why?
One possible reason may be Chile’s liberal maternity leave law, which guarantees 100% of wages for up to 18 weeks absence. This is the most liberal in the Americas, and the same as Cuba and Venezuela (in the U.S, it’s 12 weeks and 0%). This law imposes a labor cost on the employer while providing a benefit to the employee (a portion is paid by the taxpayer). Is this benefit figured into the woman employee’s compensation?
My guess is no, and that’s because the article also mentions that some employers have been reported demanding pregnancy tests for female job applicants, in violation of the law. (It’s also against the law in Chile to dismiss employees who become pregnant.) These unscrupulous employers are obviously looking for ways to avoid the significant extra cost of hiring a woman in her fertile years.